Trump to raise EU auto tariffs to 25% as trade tensions resurface

US President Donald Trump said he will raise tariffs on cars and trucks imported from the European Union to 25%, escalating trade tensions as Washington accuses the bloc of failing to comply with a previously agreed trade deal.

“I am pleased to announce that, based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States,” Trump said in a social media post.

“The Tariff will be increased to 25%.”

Tariff increase targets EU auto imports

The proposed tariffs will apply specifically to vehicles imported from the EU, while exempting those manufactured within the United States.

“It is fully understood and agreed that, if they produce Cars and Trucks in USA Plants, there will be NO TARIFF,” Trump said.

A number of major European automakers, including Volkswagen AG, Mercedes-Benz Group AG and BMW AG, have assembly plants in the US.

The move marks a shift from the earlier transatlantic agreement, under which the European Union had agreed to eliminate tariffs on US industrial goods in exchange for a 15% tariff ceiling on most EU exports.

That arrangement has faced ongoing challenges since its inception.

Trade strains already impacting flows

The tariff escalation comes as new data highlights the impact of earlier US trade measures on transatlantic commerce.

According to the Office for National Statistics, goods exports from the United Kingdom to the United States fell sharply following the introduction of tariffs.

Exports to the US, excluding precious metals, declined by £1.5 billion, or 24.7%, after the implementation of what Trump has described as “Liberation Day” tariffs.

The data also showed that UK car exports to the US have dropped and remain below pre-tariff levels in the 12 months since April 2025.

Broader implications for transatlantic trade

The latest tariff announcement signals renewed friction in transatlantic trade relations at a time when global supply chains are already under pressure from geopolitical tensions and shifting economic conditions.

The focus on automotive imports underscores the strategic importance of the sector, which is deeply integrated across US and European supply chains.

The escalation raises questions about the durability of the existing trade framework between the US and the EU, particularly as both sides navigate compliance issues and broader economic pressures.

With tariffs set to rise in the coming weeks, attention is likely to shift toward whether negotiations can stabilise relations or whether further retaliatory measures could follow, potentially disrupting trade flows further.